The Office of the U.S. Trade Representative (USTR) opened a probe into China’s maritime, logistics and shipbuilding sectors Wednesday, alleging that the country is using “unfair, non-market policies” to burden or restrict U.S. commerce.
On March 12, five labor unions led by the United Steelworkers (USW) filed a 126-page petition requesting an investigation into China’s movements into these industries, which they called “far more aggressive and interventionist than any other country.”
More from Sourcing Journal
-
Attacks on Shipping 'Unacceptable', Industry Associations Tell UN
-
Walmart Enhances E-Commerce Offerings for Marketplace Sellers
According to the unions, China has given its domestic shipbuilding industry unfair advantages by mandating the purchase and use of Chinese ships by Chinese state-owned shipping enterprises and state-owned oil companies.
The country has also intervened in its domestic industry, the unions claim, by directing mergers between “favored” state-owned companies, disapproving alliances by foreign competitors, denying berthing rights to foreign-owned ships, controlling freight rates and capacity allocations and tolerating intellectual property theft.
“This maritime and logistics infrastructure gives the Government of China access to large volumes of sensitive data regarding ship traffic, container contents, freight rates and more,” the petition said. “It also gives China leverage to provide preferential treatment to Chinese-built and -owned ships seeking to dock and unload at ports around the world, and to potentially deny such treatment to countries or companies that do not align with China’s industrial policy and geopolitical goals. With control over ports and logistics equipment and information, the Government of China could quickly disrupt critical supply chains, even where those supply chains do not rely directly on any goods manufactured in China.”
From 2000 to 2022, China’s share of new vessels built each year on a global basis rose from less than 10 percent to 47 percent, the petition said, citing data from Clarksons Research. In 2022, China built more new ships than the next two countries, Japan and South Korea, combined. While Chinese shipyards now produce over 1,000 ocean-going vessels a year, the United States produces fewer than ten.
The petition suggests that the USTR call for the implementation of a port fee on Chinese-built ships that dock at a U.S. port, the creation of a Shipbuilding Revitalization Fund to help foster competition from the domestic shipbuilding industry, as well as other measures to stimulate demand for, and the capacity to construct, commercial vessels built in the United States.